Written by Shan Saeed, IQI Chief Economist

The global economic outlook for 2025 is characterized by a slowdown, largely driven by non-financial events such as escalating geopolitical tensions, trade fragmentation, and evolving policy frameworks. Goldman Sachs highlights significant concerns regarding US fiscal health, particularly with the Trump Administration’s “One Big Beautiful Bill Act.” This legislation is expected to worsen the US deficit and debt, which are already at historically high levels outside of crisis periods, with interest expenses at record highs. These fiscal challenges suggest an unsustainable long-term trajectory for the US. 

In this shifting global landscape, the US dollar has experienced a substantial decline, losing 10.5% of its value year-to-date in 2025, marking its worst first half since 1973. This depreciation is attributed to the impact of Donald Trump’s trade and economic policies, which have prompted global investors to reconsider their exposure to the dominant currency. The dollar’s sharp fall puts it on track for its weakest six-month performance since 2009, reflecting a re-evaluation of its strength amidst the Federal Reserve’s policy complexities.